This is where you’ll find information on the process of foreclosure. First thing’s first though – a note to any reader – please consult a qualified attorney before purchasing any bank-owned property. This is a basic overview of what a “foreclosure” is.

Each state as their own laws and regulations governing the foreclosure process.

After the filing of Lis Pendens, the homeowner still has time to either pay the past-due balance to bring their loan current (cure their default) or to negotiate some kind of settlement with their lender. If this doesn’t take place, the county court will hear the lender’s claim and the court will issue an order allowing the foreclosure. Then, a legal (public) notice of when the foreclosure sale will take place is published in local papers.

When property owners stop making their mortgage payments (when there is still a balance left to be paid), they are considered in default. The “foreclosure” process begins.

A “Foreclosure” is any home in this situation.

The homeowner can still attempt to bring their loan current or reach a settlement with the lender after this point. If that doesn’t occur, the house is sold at auction to the highest bidder. At many auctions, the original lender or bank purchases the property (they are the highest bidder).

After this point, when the home is bank-owned (real estate owned, REO), it is listed with a real estate broker like myself and sold via mls or sometimes the bank/lender will hold their own auction or website auction.

“REO’s” as they are referred to, are homes that are owned by banks/lenders who carried out the foreclosure proceedings on a former owner. This is where most people buy REO’s, via a Listing Agent on the Multiple Listing Service.


The term “pre-foreclosure” simply means a home that is not yet bank-owned, but is in the process of default (foreclosure). Pre-foreclosure sales normally take place between very savvy investors, but short sales are also a sort of pre-foreclosure deal.

Short sales are entirely different from purchasing a bank-owned property in that the seller is still the owner and the bank is just the third party who is approving a sale (where they, the lender/bank, are accepting less than what is owed on the mortgage).

The Process:
Get pre-approved or have a proof of funds available (banks and real estate agents won’t consider an offer without these).
Get 203k approved as well.
Talk with a qualified attorney who handles bank-owned sales.
Call a professional – Tom McGiveron, LAB at 631-831-9048.

Question & Answer Videos

These are basic Q&A videos to help you obtain general information about the foreclosure process. Please consult an attorney before purchasing any real estate.

For more informational videos like this, visit my youtube channel.